How to handle an unfunded trust

On behalf of Cassady Law Offices, P.C. posted in Trusts on Wednesday, May 17, 2017.

Nevada residents may know that a trust may be an effective estate planning tool. However, the trust doesn't work as intended unless it is properly funded. Assets that were meant to go into that trust may need to be looked at to determine how they were owned and by whom. Without knowing the type of ownership of an asset, it may be impossible to determine how it can be transferred.

For instance, if an asset was jointly owned with another person, he or she will likely take possession of it. If the asset had a beneficiary designation, the beneficiary will likely take possession of that asset. Items that were in the deceased person's name only without any clear beneficiary may need to go through probate before it can be transferred to anyone.

In some cases, a deceased person will have created a pour over will that transfers assets into a trust. If so, the trust may ultimately control those assets. In the event that a deceased person had a will of any kind, it will have to go through probate. Otherwise, state intestacy laws may determine who gets any property that the person may have left behind. Even if a trust isn't used, it may be a good idea to keep a copy of it just in case.

Proper trust planning may enable an individual to avoid problems that may make it harder to carry out his or her final wishes. Reviewing a trust with an attorney may increase the odds that it is properly funded and that it is written to best reflect the wishes of its creator. If necessary, an attorney may be able to create a new trust or make corrections to an existing one in accordance with state law.

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